Senate Dems criticize patent proposals

Senate Democrats raised concerns with the leading Senate patent reform bill on Tuesday.

During a hearing on the Patent Transparency and Improvements Act — authored by Chairman Patrick Leahy (D-Vt.) — members of the Senate Judiciary Committee said that they worry certain patent reform proposals could limit the court system and harm patent holders looking to bring legitimate lawsuits.

“I’m wary of overkill,” Sen. Richard Blumenthal (D-Conn.) said. “I’m wary of unintended consequences.”

Blumenthal expressed concerns with proposed fee-shifting provisions that could end up in the bill.  

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The provisions would direct courts to require the losing party of a meritless patent infringement lawsuit to pay the winning party’s fees. Supporters say those provisions would increase the costs of bringing meritless lawsuits, while opponents say the provisions might discourage patent holders from pursuing justified cases.

Sen. Dick Durbin (D-Ill.) called the proposed fee-shifting provisions “high stakes legal poker.”

If patent reform includes a fee-shifting provision, the companies and individuals that lose patent infringement lawsuits would have to prove that the case wasn’t meritless, he said.

Sen. Mike Lee (R-Utah) — who introduced the Patent Transparency and Improvements Act with Leahy — responded to critics of the bill who say Congress should wait until the Supreme Court rules in two cases over fee-shifting.

The Supreme Court is set to hear two cases relating to fee-shifting: Octane Fitness, LLC v. Icon Health & Fitness, Inc. and Highmark Inc. v. Allcare Health Management Systems.

Lee pushed back on the idea that Congress should wait for a Supreme Court decision.

“To the extent that there is ambiguity in the law that they need to address … why shouldn’t we address it on our own?” he asked.

“After all, they are interpreting law, and we make the law.”

Sen. Whitehouse (D-R.I.) told the patent reform advocates testifying at the hearing to “be as flexible as you can be to get a bill through the Senate.”

Patent reform advocates have “a pearl beyond price” in the House’s passage of the Innovation Act and should be willing to compromise to get a similar result in the Senate, he said.

Sen. Diane Feinstein (D-Calif.) asked Leahy to proceed with caution and said she would be introducing her own bill to restore funding to the Patent Office.

The Patent Office — which is fully funded by fees from patent applicants — has seen some of its funding diverted because of sequestration. Because of that fee diversion, some Patent Office initiatives, including opening satellite offices in Silicon Valley, Colorado, Texas and Michigan.

The Patent Office was only able to open its Silicon Valley office recently because of donations from the city of San Jose and California, Feinstein said. “It shouldn’t be that way.”

She said she will introduce a bill to end fee diversion “that will hopefully become an amendment” to Leahy’s bill.

“I hope you, Mr. Chairman, will take that into consideration as you move your bill.”

Feinstein also asked Leahy to hold another hearing on the topic of patent reform to include voices not represented at Tuesday’s hearings, including universities with patent portfolios.

“This is such a difficult, complicated arena,” she said. “Please have another hearing.”

Sen. Chris Coons (D-Del.) urged the committee to take the time to craft a patent reform bill.

“If we could dedicate six years to getting the [America Invents Act] right,” he said, referencing the 2011 patent reform bill, “I think we can dedicate a few more months.”

Leahy — who dicussed the need for more transparency around patent infringement accusations and protections for customers who purchase patented goods during the hearing – has said he hopes to pass a patent reform bill this Congress.